How do we make sure we have an education system that is welcoming for all? Hong Kong’s landfills will be out of space by 2020 – what will we do with all our rubbish? The population is rapidly ageing: do we have enough skilled workers in the pipeline? Hong Kong, like many major cities, has plenty of pressing social problems that need to be addressed.
Who should solve them? It’s not sustainable for governments alone to address social issues – if it was we wouldn’t have so many. If the Hong Kong government was to singlehandedly run a myriad of new or enhanced services, it would no doubt have to impose higher taxation levels which wouldn’t be popular. Perhaps more importantly, governments don’t necessarily have the skills to address the real cause of the problems. Instead they provide services to deal with the fall out, rather than coming up with innovative solutions.
Many of the world’s problems - from income inequality to climate change - are so far-reaching that solutions are virtually impossible without the expertise and scalable business models of the private sector. It’s clear that society needs the help of our community’s best business brains to come up with some fresh ideas and ways of thinking.
A business model, called creating shared value, sees businesses applying their skills and expertise to solve social problems – in a way that is not only profit-driven, but more critically, purpose-driven. Companies that embrace this approach simultaneously deliver social value for the communities where they operate and sustainable economic value for their shareholders in the long run.
A social impact consulting firm surveyed 174 Hong Kong companies on their awareness and adoption of shared value. Initial findings from the survey suggest that many companies are behind the curve in understanding how shared value differs from other forms of corporate social engagement.
In Hong Kong, most companies still think of their social impact primarily in terms of philanthropy or corporate responsibility. Of course, both are important. Many worthy charities count on corporate philanthropy, and some organizations have long advanced prosperity and well-being in Hong Kong. Nowadays, every company is also rightly expected to pay attention to its environmental, social and governance (ESG) performance. But philanthropic funds are limited and ESG in itself doesn’t produce profit. Shared value does, by pushing companies to find new business models that create economic value by meeting the needs of their communities.
Hong Kong is a dynamic regional business hub with critical social problems. The business world in this vibrant market needs to realise the potential in problems. Tackling social issues enables growth and development and so the quality and dedication of the workforce, the mission and engagement of employees, the operating environment and public spending power improves too. It’s more than a win-win, it’s a winning virtuous cycle of development and one Hong Kong should step onto soon - setting an example of a purpose-driven economy to the rest of Asia. This is why we need to bring together people from across all sectors to work together, to strengthen society and the economy of Hong Kong.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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Mark Kramer is the co-founder and managing director of FSG and the author of influential publications on shared value, corporate social responsibility (CSR), catalytic philanthropy, strategic evaluation, impact investing and adaptive leadership.
Mark oversees FSG’s consulting practice and helps drive the vision and growth of the firm. He has led consulting engagements across all of FSG’s impact areas, with particular emphasis on philanthropic strategy for private and community foundations, CSR, evaluation and impact investing. He also leads the research on many of FSG’s publications and publishes regularly in Harvard Business Review, Stanford Social Innovation Review, and is the co-author of the book Do More Than Give.
He is a frequent speaker around the world on topics in catalytic philanthropy, collective impact, creating shared value for corporations, new approaches to evaluation and shared measurement, impact investing, social entrepreneurship and adaptive leadership.
Before co-founding FSG, Mr. Kramer served for 12 years as president of Kramer Capital Management, a venture capital firm, and before that as an associate at the law firm of Ropes & Gray in Boston, and as a law clerk to Judge Alvin B. Rubin, Fifth Circuit, U.S. Court of Appeals.
After earning his B.A. (summa cum laude) and M.B.A. at Brandeis University and University of Pennsylvania, respectively, he went on to achieve his J.D. (magna cum laude) at the University of Pennsylvania Law School.